The federal government has announced in the Budget on Tuesday that it will invest AU$102.2 million over the next five years to overhaul the Child Support Agency's IT system.

The "Cuba" system for IT support has been in place for over a decade. Human Services Minister Jan McLucas said the system, which is responsible for distributing AU$250 million in child support payments every month, is now outdated and at the end of its lifespan.

If the government waits longer to replace it, it would risk higher maintenance costs and a greater risk of error, she said.

"It's important we have the right IT infrastructure in place to ensure parents continue to receive their correct entitlements now and into the future," McLucas said.

The upgrade is set to begin in July this year, and will be in place by December 2015, with further upgrades to be finished by June 2018.

The Department of Human Services (DHS) also announced that it would look to overhaul welfare agency Centrelink's core IT system, which oversees over 100 government programs. The government will put in AU$16.2 million over the next two years to put together a business case for the future of the Income Security Integrated System.

"The Centrelink IT system supports assessments and delivery of income support and family payments to over 7 million people, with over half a billion dollars depositing into the bank accounts of Australians every working day," McLucas said.

"IT requirements are extensive, and the review will examine options to ensure we can continue to support and deliver future government programs efficiently and effectively."

In data matching with the Australian Taxation Office (ATO) against the Pay-As-You-Go payment summaries, the Department of Human Services is also looking to save taxpayers more than AU$67 million over the next four years from people who are receiving Centrelink payments despite earning more than they are reporting.

"We already have a highly sophisticated data-matching system and teams of fraud investigators all over the country, and this will enhance their capabilities," McLucas said.

"Most people do the right thing, and let Centrelink know about changes to their financial circumstances so their income-tested payments can be accurately calculated, but this is about ensuring people receive what they are legally entitled to."

The ATO will receive AU$77.8 million over the next four years to improve its data-matching systems for this purpose, which will, overall, bring in AU$610.2 million over the forward estimates period.

AU$30 million will also be spent to maintain call centres for the department, but the government is expecting to save AU$18 million over the forward estimates as now more students, apprentices, and trainees are using the Express Plus Student app to interact with the department, rather than over the phone.